Those who qualify for a reverse mortgage may be able to reap more benefits from doing so than refinancing their home loan for a lower mortgage rate or mortgage payment. If you have equity in your home and are over the age of 62 you are able to get a reverse mortgage loan. However, it will depend on your personal situation as to whether it is in your best interest to do so or not.
A reverse mortgage basically gives you money based on your home’s value, your age, and how much, if any, you owe on your home, among other things. A reverse mortgage can be valuable if you owe little or no money on your home because the money from a reverse mortgage must first go toward your mortgage. If you qualify for a $200,000 reverse mortgage and owe $50,000 on your home, you only keep $150,000. Obviously, this is going to be helpful, as you have paid off your mortgage balance and have money left over.
In some cases, a reverse mortgage is going to be equal to or less than what you owe on your home, and can be helpful in this case as well. If a reverse mortgage goes toward what you owe on your home and still leaves money owed, depending on if the difference is affordable, you may be able to get rid of your mortgage payment. For instance, if the reverse mortgage pays off everything but $5,000 or $10,000 on your mortgage and you have that much saved, you can pay the rest on your mortgage and you no longer have a mortgage payment.
Keep in mind; even though a reverse mortgage can be very beneficial, it is debt. The homeowner doesn’t have to repay the reverse mortgage unless they move or the money isn’t owed as long as they are alive, but the debt could eat into the estate of the homeowner. If you are looking for money from you home later in life, do some research on reverse mortgages and look at your personal situation to see if a reverse mortgage is right for you.
For more information contact Senior Solutions at (954) 456-8984 or toll free at 1-800-213-3524
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